Myers Industries’ common shares will need to reach $39 to achieve average annual stock market performance of 9.0% over the next 6 years. Upper quartile performance will require a $46 Myers Industries stock price by 2029. At the current price of $23, what is the market’s view of Myers Industries’ future operating performance?
Executive Summary
- Price Target Research identifies Myers Industries as having: stability, average profitability, below average expected growth, and low financial strength. A big positive influence on Myers Industries’ valuation is its superior Profitability.
- Very high valuation, lagging shareholder returns. Current valuation levels are very high relative to the Myers Industries Peer Group. Recent market returns have substantially underperformed the Myers Industries Peer Group. Total shareholder returns expected to significantly lag the overall equity market. Based on current investor expectations, Myers Industries shares should reach a level of $25 by 2029 — an 4.2% per year total shareholder return. A 2029 stock price of $39 would reflect median performance and a price of $46 would be required to reach upper quartile performance.
- Myers Industries’ past growth is modestly above average. Historical growth has been high relative to the Myers Industries Peer Group and forecasted growth is relatively below average. EPS Growth has lagged. This factor has negatively affected market perceptions of Myers Industries. Myers Industries’ historical income statement growth has been in line with balance sheet growth. Revenue growth has paralleled asset growth; earnings growth has paralleled equity growth and return on equity has been stable.
- Profitability has been Myers Industries’ biggest valuation strength. Asset Turnover is group leading. This factor has strengthened market perceptions of Myers Industries. The company has high excess cash and will have to work to reinvest at attractive returns to support profitability and valuation.
- Myers Industries’ risk profile is favorable. Overall variability has been above average with above average revenue variability, relatively low E.P.S. variability, and only average stock price volatility. Financial Strength is below average and earnings’ expectations are relatively very high. The debt/capital ratio has declined very significantly.
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